Aurelia Butler

Net purchases in global equity funds slipped to $5.15 billion, the lowest amount since the week ended Oct. 13, Refinitiv Lipper data showed. Graphic: Fund flows into global equities bonds and money markets – https://fingfx.thomsonreuters.com/gfx/mkt/zjpqkwgqzpx/Fund%20flows%20into%20global%20equities%20bonds%20and%20money%20markets.jpg Expectations of a U.S. interest rate hike as early as mid-2022 got a boost last week after data showed U.S. consumer price inflation hit its highest level in 31 years in October.In addition, China’s October factory gate prices rose at the fastest pace since 1995, while British inflation has hit a 10-year high.U.S. and Asian equities funds faced outflows of $1.98 billion and $0.35 billion, respectively.Meanwhile, European equities funds lured a net $5.42 billion in inflows after European Central Bank President Christine Lagarde pushed back against widespread rate hike expectations in the market.Among sector funds, technology and consumer discretionary funds received $907 million and $473 million respectively in inflows, while industrials and healthcare funds faced outflows of $643 million and $411 million respectively. Graphic: Global fund flows into equity sectors – https://fingfx.thomsonreuters.com/gfx/mkt/xmpjorxgmvr/Global%20fund%20flows%20into%20equity%20sectors.jpg Global bond funds drew $6.22 billion in net buying, a 39% decline from the previous week.Inflation-protected funds secured $1.91 billion in net buying, while government bond funds pulled in $3.26 billion, the biggest weekly inflow since Aug. 4. On the other hand, corporate bond funds saw outflows worth a net $655 million. Graphic: Global bond funds’ flows in the week ended Nov 17 – https://fingfx.thomsonreuters.com/gfx/mkt/zdpxonwoovx/Global%20bond%20funds’%20flows%20in%20the%20week%20ended%20Nov%2017.jpg Meanwhile, global money market funds received $5.07 billion in net purchases, marking the smallest inflow in four weeks.Data for commodity funds showed precious metal funds drew a net $817 million after seven straight weekly outflows as gold prices rallied to a five-month peak this week. Energy funds attracted $124 million, marking a third consecutive week of inflows.An analysis of 23,953 emerging market funds showed investors purchased equity funds for a third subsequent week worth a net $431 million but sold $1.75 billion in bond funds. Graphic: Fund flows into EM equities and bonds – https://fingfx.thomsonreuters.com/gfx/mkt/gkplgdzmrvb/Fund%20flows%20into%20EM%20equities%20and%20bonds.jpg More

WASHINGTON (Reuters) – The U.S. House of Representatives will vote on President Joe Biden’s $1.75 trillion social and climate spending bill on Friday after an hours-long overnight delay by the chamber’s top Republican.Democrats, who hold a slim majority in the House, are seeking to advance Biden’s massive domestic investment bill https://www.reuters.com/business/cop/whats-bidens-175-trillion-build-back-better-package-2021-11-05, which has been scaled down from their initial $3.5 trillion plan but still aims to invest millions to expand education, lower healthcare costs and tackle climate change.The chamber reconvened at 8 a.m. (1300 GMT) with a vote planned soon after. If the measure passes, it would still need approval in the Senate, where it is likely to face changes, before Biden could sign it into law. The move comes after Republican House Minority Leader Kevin McCarthy spoke for more than seven hours starting late Thursday night in remarks cataloging a list of Republican grievances – some related to the bill and some not – while at times shouting over Democrats in the House who were openly dismissive of his obstruction.It also follows the Congressional Budget Office’s (CBO) estimate that the bill would raise federal budget deficits by $367 billion over 10 years, but that additional revenues from improved Internal Revenue Service (IRS) tax collections could generate a net increase in revenues of $127 billion through 2031. The White House estimates the IRS changes will generate $400 billion in additional revenue and says the bill overall will reduce deficits by $121 billion over a decade.Several moderate Democrats said they needed the CBO’s assessment before they would vote, and several of them said they accepted the White House’s math.The legislation follows the $1 trillion infrastructure https://www.reuters.com/world/us/roads-bridges-airports-details-bidens-1-trillion-infrastructure-bill-2021-11-05 investment bill that Biden signed into law this week – two key pillars of Biden’s domestic agenda – and a separate $1.9 trillion COVID-19 relief package that passed in March. More

Speaking soon after ECB President Christine Lagarde called for ongoing support for the euro zone’s economy, Weidmann struck a decidedly different tone.”Higher inflation expectations and higher wage growth could strengthen price pressures in the medium term,” Weidmann said. “And it could well be that inflation rates will not fall below our target over the medium term, as previously forecast.”Weidmann, who will step down at the end of the year after a decade of largely vain opposition to the ECB’s easy-money policy, said the ECB should in fact signal it is ready to tighten policy if needed.”Given the considerable uncertainty about the inflation outlook, monetary policy should not commit to its current very expansionary stance for too long,” he said.”And to keep inflation expectations well anchored, we need to reiterate over and over again: if required to safeguard price stability, monetary policy as a whole will have to be normalised.” More

A total of 170 jobs are to be created in Northern Ireland by one of the world’s biggest packaging companies, the latest business seeking to exploit the region’s “best of both worlds” post-Brexit trading status.Ardagh Metal Packaging on Friday announced plans to build a $200m beverage can plant near Belfast, from which drinks will be exported both to Britain and EU markets.The investment is one of the largest greenfield projects in the region since Brexit took effect and will be seen as a vote of confidence in the controversial Northern Ireland protocol.The 2019 protocol gives Northern Ireland free access to the wider UK market, while leaving it within the EU’s single market for goods. The region is the only place in Europe with free access to both markets.Although the arrangement is widely supported by businesses in the region, the British government is threatening to suspend parts of the protocol as talks with the EU continue.Lord David Frost, UK Brexit minister, has claimed the deal imposes excessive checks on goods moved from Great Britain across the Irish Sea to Northern Ireland and has threatened to activate the Article 16 override mechanism in the treaty. Talks with the EU continued in Brussels on Friday.Luxembourg-based Ardagh, which has origins in glassmaking in Dublin, said its “state of the art” plant would service “the growing needs of AMP’s beverage customers in Ireland, the UK and Europe”. Relatively low labour costs in the region were another factor in the company’s choice of location. People close to the deal said the factory would create 170 high quality jobs, including technicians and engineers.Oliver Graham, chief executive of AMP, said: “We are delighted to be investing in Northern Ireland, supporting our clients’ sustainability needs and further reducing our carbon footprint by locating closer to our end customers.” Its customers include Coca-Cola, which has a plant in Lisburn.Last year Michael Gove, secretary of state for levelling up, said businesses in Northern Ireland would get “the best of both worlds” under the protocol, and many employers want the Brexit arrangement to continue.Ardagh’s investment came days after Northern Irish pharmaceuticals group, Almac, announced it was creating 1,000 jobs in the region over the next three years as part of a global expansion.Almac, which develops and manufactures pharmaceuticals and is based in Craigavon, sang the praises of the protocol, telling its customers the post-Brexit deal offered “unique, unfettered and flexible access to the UK, Europe and beyond”.Not all businesses were as effusive about the protocol being a win-win for Northern Irish companies, with many filled with dread at the prospect of yet more disruption and uncertainty if Article 16 was triggered.“Our exporters are having the time of their lives at the moment,” said Stephen Kelly, chief executive of Manufacturing NI, a lobby group. That is borne out by booming cross-border trade. Ireland’s imports from Northern Ireland leapt 60 per cent in the first nine months of this year, compared with the same period last year, according to official Irish statistics.“[Businesses are] concerned the uncertainty created around triggering Article 16 would be viewed as real [legal] jeopardy,” Kelly added. “The minute it’s done, Northern Ireland will be viewed as legally challenging and boardrooms and customer orders will begin to be impacted that very same day, that’s just the reality of it.”

One business leader, who asked not to be named, said: “Triggering Article 16 would create another uncertainty lasting another 12 months if not longer, just as we’re entering the Christmas period.”He said one manufacturing company, which did not want to be identified, had planned to move some operations from Ireland into Northern Ireland in order to benefit from both jurisdictions, but had put the plans on ice while they “wait and see” how UK-EU talks go.“We’re not happy at all to be back to this Brexit stuff,” said Damian McGenity, a part-time beef farmer and spokesman for the Border Communities Against Brexit group, which is organising protests at five points along the border on November 20. “Order books are full, businesses are recovering well [from Covid-19]. This is the last thing we need,” said McGenity. “Most business people want to get on with business.”  More

BRISTOL, England (Reuters) -Patience will be needed before British inflation returns to the Bank of England’s 2% target, creating an uncomfortable time to be a central banker, the BoE’s chief economist Huw Pill said on Friday.”There’s no quick fix, and that lack of a quick fix means some patience will be required,” Pill told a conference in Bristol hosted by the Economics Observatory and the Festival of Economics.Pill said he had not made up his mind whether he would vote for a rise in interest rates to 0.25% from 0.1% next month, which financial markets price in as a near-certainty after data earlier this week showed inflation had risen to a 10-year high of 4.2%.BoE Governor Andrew Bailey and Pill have both said interest rates will need to rise to tame inflation, but markets were wrong-footed earlier this month when the BoE’s Monetary Policy Committee decided to wait for more labour market data before deciding on a move.Pill said policy communication was getting more complicated due to two-sided risks to growth and inflation, in contrast to the heavy downside risks during the COVID-19 pandemic.The BoE wanted to “train” markets to focus more on the medium-term outlook and two-sided risks, said Pill, a former Goldman Sachs (NYSE:GS) economist, but some volatility was unavoidable given uncertainty about the precise timing of rate rises. More